- Australia’s benchmark Treasury bond yields print four-day downtrend, renews intraday low after Aussie data.
- Australia Wage Price Index missed upbeat forecast on YoY, repeats QoQ readings in Q2.
- Fears in Australia’s equity market, China-linked pessimism also weigh on the Aussie bond coupons.
The rush towards Australia’s Treasury bonds escalated after the nation published a downbeat Wage Price Index for the second quarter (Q2). The yields also take clues from the fears prevailing in Aussie equity markets. That said, the benchmark 10-year Treasury yields take offers to refresh the intraday low near 3.276% during Wednesday’s Asian session.
Aussie Q2 Wage Price Index reprinted 0.7% QoQ growth while missing 0.8% expectations. Further, the YoY figures also eased below market forecasts of 2.7% to 2.6%, versus 2.4% YoY prior.
On the other hand, gains in mining shares should have favored the Aussie equity traders even as a sharp drop in biomedical giant CSL Ltd. challenges the bulls.
On Tuesday, the RBA Minutes mentioned that the board expects to take further steps in normalizing monetary conditions over the months ahead, but it is not on a pre-set path, per Reuters.
It’s worth noting that China’s readiness for multiple measures to tame recession woes failed to convince the markets that the dragon nation could avoid economic slowdown. Also fueling the flight to safety is Europe’s signals to renew the nuclear deal with Iran while pushing back plans for the closure of Germany’s last three nuclear power plants. On the same line was the Washington Post (WaPo) news that Chinese authorities ordered factories to suspend production in several major manufacturing regions to preserve electricity, as the country faces the worst heat wave in six decades.
On a broader front, the cautious mood ahead of US Retail Sales for July, expected 0.1% versus 1.0% prior, as well as the Federal Open Market Committee (FOMC) meeting minutes, also weigh on the market sentiment and the Aussie Treasury bond yields.
While portraying the sentiment, US 10-year Treasury yields fade the previous day’s rebound while S&P 500 Futures retreat from a four-month high. Further, Australia’s benchmark equity index ASX 200 prints mild losses at around 7,098 by the press time.
Moving on, headlines concerning China and the recession will be important for the AUD/USD traders ahead of Thursday’s Aussie jobs report.
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